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Off-grid solar investment is expected to decline by 30% in 2024, with early-stage companies and production-use technology the hardest hit, according to Gogla. The global industry association for off-grid solar adds that scale-up companies attracted 77% of the nearly $300 million invested, indicating greater commercial viability among mature players. Total investment in off-grid solar companies in 2024 reached nearly $300 million, according to Gogla, the global association for the off-grid solar industry. Its 2024 investment database showed a 30% decline compared to 2023. Gogla said the slowdown hit early-stage companies and production-use technologies hardest, which, she added, “threatens innovation, scale, and impact at a time when the sector is poised for a major breakthrough.” The association added that last year marked an inflection point, noting that “behind the slowdown are companies that have adapted to tougher conditions, demonstrated their ability to scale, and built models that balance financial strength with inclusive impact.” Startups raised more than three-quarters of last years total, raising $229 million, the majority through securitizations and off-balance-sheet structures. According to Gogla, mature companies are demonstrating their commercial viability and that the sector can generate impact and profitability. In contrast, investment in startups fell by 70%, which the association said reflects broader venture capital trends in Africa. The change is painful, but expected, and it leaves behind a more resilient cohort of adaptable startups, the association stated. After a prolonged capital shortage, the sector has already experienced a wave of consolidation that, while difficult, has streamlined the landscape and brought to the surface a stronger group of capital-efficient, impact-driven companies. Early-stage companies raised $21 million, matching last years total. A record 67 early-stage companies secured funding, with nearly two-thirds (62%) of the investment going to domestically funded companies. According to Gogla, blended capital packages—which combine grants, equity, and technical assistance—are opening new avenues for these companies. Laura Fortes, director of Access to Finance at Gogla, stated that the sector has experienced significant exits and consolidations, but highlighted the resilience of the companies that remain. “The demand is strong, the public value is undeniable, and the opportunity is real,” Fortes said. “But to unlock it at scale, we need donors to urgently address the affordability gap so that businesses can do what they were created to do: deliver.” Goglas investment database shows a new wave of support emerging through the launch of patient capital funds, the Green Climate Fund, and the M300 initiative. The M300 initiative aims to connect at least 300 million people in Africa to electricity by the end of the decade and is preparing results-based financing plans to address the affordability gap. “Off-grid solar companies are projected to electrify nearly half of the global population currently lacking access to electricity—communities marginalized from development and economic opportunity,” Gogla said. “With 2030 fast approaching, the next five years will be the final push.” |
